Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) with a projected PE of 12, 10, and 9 times for the years 2025, 2026, and 2027 respectively, based on the market capitalization of HKD 39.5 billion [4]. Core Views - The company reported a revenue of HKD 9.151 billion for H1 2025, a decrease of 9.36% year-on-year, and a net profit attributable to shareholders of HKD 1 billion, down 46.66% [1]. - The decline in revenue is attributed to the company's proactive inventory reduction strategy, particularly in the infant formula segment, and the provision of fertility subsidies to consumers [2]. - The gross profit margin for H1 2025 was 61.58%, a decrease of 6.30 percentage points year-on-year, primarily due to increased costs of raw milk powder [3]. Summary by Sections Financial Performance - In H1 2025, revenue from dairy products and nutritional supplements was HKD 9.143 billion, down 9.08% year-on-year, while raw milk revenue fell by 79.82% to HKD 0.08 billion [2]. - Revenue from mainland China, the US, and Canada was HKD 9.041 billion, HKD 0.91 billion, and HKD 0.18 billion respectively, with year-on-year changes of -9.47%, +11.94%, and -30.69% [2]. - The company's other income and gains decreased by 37.4% to HKD 540 million, mainly due to reduced government subsidies and interest income [3]. Profitability - The net profit margin for H1 2025 was 10.93%, down 7.64 percentage points year-on-year, influenced by the decline in gross margin, reduced government subsidies, and increased administrative expenses [3]. - Administrative expenses rose by 4.7% to HKD 774 million, primarily due to increased employee compensation [3]. Future Projections - The company is expected to achieve net profits of HKD 3.007 billion, HKD 3.472 billion, and HKD 3.818 billion for the years 2025, 2026, and 2027, reflecting year-on-year growth rates of -15.78%, 15.48%, and 9.96% respectively [4].
中国飞鹤（06186）：H1主动去库存，盈利短期承压